Current News Ecology & Environment Survey/Study/Report

Transforming Agrifood Systems with Forests

Recently, a report on deforestation, livestock grazing, and farmer field schools was published by the Food and Agriculture Organization (FAO) of the United Nations.

FAO has released the report at FAO-Global Landscapes Forum: Transforming agrifood systems with forests.

Key highlights of the Report

• According to the FAO's Global Forest Resources Assessment 2022, 420 million hectares of forest have been destroyed worldwide over the past 20 years.
  • To reduce deforestation, which reached at 11 million ha per year between 2000 and 2010, forests are essential.
• The report finds that the amount of food needed to feed the world's population will increase by 50% by 2050 compared to 2012.
• Crop and animal production will require 165 to 600 million additional hectares of land, the majority of which is already covered by forests and other vital ecosystems.
• Nearly 90% of global deforestation between 2000 and 2018 was caused by increased agricultural production.
  • This has a detrimental effect on related ecosystem services including biodiversity and carbon sequestration.

Major Recommendations of the Report

• The need of the hour is to build sustainable global agrifood systems based on the synergies between agriculture and forests that provide a win-win outcome for both sectors.
  • Governments need to pay special attention to smallholder farmers, who produce roughly 35% of the world’s food;
  • But they often live in poverty and cannot afford the costs or interruptions to income incurred through changing the way they work.
• Properly integrated grazing can play a vital role in restoring degraded land with trees, halting desertification and improving wildfire prevention in drylands.
• Drylands are home to about 25% of the global population, contain 50% of the world’s livestock, 27% of the world’s forests and are where about 60% of the world’s food production takes place.
• Silvopastrolism (combining animal grazing and trees) can also help enhance local community’s food security and income by preventing land degradation.
• As part of an integrated landscape approach utilizing agroforestry, landscape planners and decision-makers should consider livestock as part of the solution and carefully restore open tree cover (when tree cover is between 30 and 70%).

• Governments worldwide must provide this coordination so that different sectors and stakeholders at all levels – international, national, regional and local – work towards shared goals.
• Governments should create the legislative frameworks and provide financing and market conditions that favour approaches.

Importance of Agroforestry for India

• Agroforestry meets almost half of the country’s fuelwood needs, about two-thirds of the small timber demand, 70-80% of the plywood requirement, 60% of the raw material for the paper pulp industry, and 9-11% of the green fodder needs.
• Agroforestry or tree-based farming is an established nature-based activity that can aid carbon-neutral growth.

Government’s Initiatives to improve Agroforestry in India

• India is the first country to adopt an agroforestry policy - National Agroforestry Policy (NAP) - to promote employment, productivity, and environmental conservation.
• A tagline: “Har medh par ped” (trees on every field boundary) was launched with nearly ₹1,000 crore in 2016 to transform agroforestry into a national effort.
• The Ministry of Agriculture and Farmers’ Welfare merged the Sub-Mission on Agroforestry (SMAF) with the Rashtriya Krishi Vikas Yojana which deprived the agroforestry sector of its flagship implementation arm.

Current News Indian Economy Banking & Finance

Economic Nobel 2022: An Insight to avoid both Serious Crises and Expensive Bailouts

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2022 was awarded to Ben S. Bernanke, Douglas W. Diamond, Philip H. Dybvig (all from the USA) “for research on banks and financial crises”.

• Together, the work for which Bernanke, Dybvig and Diamond have been recognised has also laid the foundation for modern bank regulations. Their work has been “crucial to subsequent research that has enhanced our understanding of banks, bank regulation, banking crises and how financial crises should be managed”.
• They have demonstrated the importance of preventing widespread bank collapses that also gives an insight to avoid both serious crises and expensive bailouts.

(Image Source: WSJ)

Diamond and Dybvig’s Analysis

Since the Global Financial Crisis of 2008, banks have lost their sheen in the public eye. They are often seen as money-grabbing institutions that exist to profit off borrowers as well as depositors.

But in a world without banks, it would be impossible to make any long-term investment. That’s because, as Diamond and Dybvig’s 1983 paper showed, there are “fundamental conflicts between the needs of savers and investors”.

Savers-Investors Conflict

• Savers always want access to at least some part of their savings for unexpected use; this is also called the need for liquidity. They want the ability to pull out money when they need it.
• Borrowers, especially those taking out a loan for building a home or building a road, need the money for a much longer time. Borrowers cannot function if the money can be demanded back at a short notice.

Resolving this Mismatch

• Diamond and Dybvig showed that these mismatches can best be solved by institutions constructed exactly like banks.
• They developed a theoretical model that explains how banks create liquidity for savers, while borrowers can access long-term financing.

Banks as an Intermediaries in Crisis

• Their analysis also showed how the combination of these two activities (savings and lending) makes banks vulnerable to rumours about their imminent collapse.
• If a large number of savers simultaneously run to the bank to withdraw their money, the rumour may become a self-fulfilling prophecy – a bank run occurs and the bank collapses.

Scrutinizing Investments

• Diamond demonstrated how banks perform another societally important function. As intermediaries between many savers and borrowers, banks are better suited to assessing borrowers’ creditworthiness and ensuring that loans are used for good investments.

Ben Bernanke’ Analysis: Bank Run

Ben Bernanke analysed the Great Depression of the 1930s, the worst economic crisis in modern history. Among other things, he showed how bank runs were a decisive factor in the crisis becoming so deep and prolonged.

What is Bank Run?

• Bank runs happen when depositors become worried about the bank’s survival, and rush to withdraw their savings.

Effects of Bank Run

• Bankruptcy: If enough people withdraw their money simultaneously, the bank’s reserves cannot cover all the withdrawals, and it is driven to bankruptcy.
• Productive Investments are hampered: When the banks collapsed, valuable information about borrowers was lost and could not be recreated quickly. Society’s ability to channel savings to productive investments was thus severely diminished.

Finally Financial Crisis Decoded

• Until Bernanke’s paper, bank failures were seen as a “consequence” of the financial crisis. But Bernanke’s 1983 paper proved it was exactly the opposite— bank failures were the “cause” of the financial crisis.
• Using a combination of historical sources and statistical methods, his analysis showed which factors were important in the drop in GDP. He found that factors that were directly linked to failing banks accounted for the lion’s share of the downturn.

Remedy Options

• Bernanke demonstrated that the economy did not start to recover until the state finally implemented powerful measures to prevent additional bank panics.
• The deposit insurance provisions — where a certain amount of one’s deposits in a bank are insured — is a critical tool towards building trust and preventing bank runs.

News Crux Defence/Military Exercises

JATE “Manesar Anti-Terror 2022”

The National Security Guard (NSG) is holding the stage 2 of a multinational joint anti-terror exercise (JATE) from October 8 to October 13 at its campus at Manesar in Gurugram under the Regional Anti-Terrorist Structure (RATS) of the Shanghai Cooperation Organisation (SCO) framework.

• The stage 2 of the exercise is being participated by eight representatives from national counter terrorism forces of Kazakhstan, Kyrgyz Republic, Uzbekistan, Russian Federation and NSG of India.
• The JATE “Manesar Anti-Terror 2022” is aimed at exchanging expertise and best practices and building synergy between the Counter Terrorism Forces of the SCO RATS member countries to enhance capabilities for conducting anti-terrorist operations and countering other security threats collectively.
• The Stage 1 of the Exercise was conducted from July 27 to August 1 by the National Counter Terrorist Forces of SCO member countries in their respective territories.

About RATS

• Regional Anti-Terrorist Structure (RATS) is one of the permanent organs of the SCO and IS Headquartered in Tashkent, Uzbekistan.
• The objective of SCO RATS is to facilitate cooperation and coordination against Terrorism, Extremism and Separatism.
• India assumed the chairmanship of the Council of SCO RATS in Oct 2021.

JATE

• Joint Anti-Terror Exercise (JATE) is an annual Counter Terrorist Exercise held within the framework of the SCO RATS.

Sports In News

Pankaj Advani wins 25th World Title

Indian cueist Pankaj Advani defended his World Billiards Championships (150-up) title for the 5th time, beating compatriot Sourav Kothari in the best-of-7 frames final at the High End Snooker Club in Kuala Lumpur, Malaysia for a record 25th title at the global level.

• Pankaj's last world title came over 12 months ago in Qatar where he won the IBSF Six-Red Snooker World Cup.